'DNA' exclusive: Jaiswal slept over CBI probe requests in coal scam

Coal minister Shriprakash Jaiswal, embroiled in the coal block allocation controversy, is likely to face more trouble. He will have to explain why his ministry slept over requests from the CBI since 2010 to inquire a corruption case against CMD of Western Coalfield Ltd (WCL). Jaiswal also sat over the vigilance report in the case for over a year.

The case pertains to the submission of a fake bank guarantee worth Rs2.24 crore by Ms Shri Sai Construction Company for the contract of diversion of the Motta Ghat canal at the Padmapur opencast mine of Chandrapur area, WCL worth Rs14 crore. The tender was passed in 2007.  

Documents accessed by DNA show that in March, 2010, the CBI apprised the ministry about the misconduct of WCL officials.

It also wrote to the ministry, seeking permission of the central government to conduct an inquiry on the role of DC Garg, CMD of WCL, and a joints-secretary level official. Three months later, the CBI sent a reminder to the ministry about carrying out an inquiry.  

Failing to get a response from the ministry, the CBI wrote to the Central Vigilance Commissioner (CVC) in October 2010. The CBI said even the agency’s director had written to the coal ministry and sought approval for the inquiry.  

The letter, accessed by DNA, said: “The director, CBI, has also written a letter to the secretary, coal ministry for seeking approval under section 6A of the Delhi Special Police Establishment Act to register a case of criminal misconduct against DC Garg, but so far no action has been taken. Mr Garg continues to enjoy his posting in the midst of all the allegations.”

Following this, the CVC asked the ministry either to grant permission or explain reasons for not doing so. The ministry finally referred the matter to the Chief Vigilance Officer (CVO) of the WCL in December 2010.

DNA’s email queries to Jaiswal and coal secretary SK Srivastava on Friday about reasons for not allowing the CBI to investigate the case have not been answered.  

The WCL CVO submitted his report in January 2011, but no action has been taken to date. A vigilance department source said the matter was under ‘examination’. Interestingly, the report, which is in DNA’s possession, concluded that there was indeed an aspect of criminal case and has recommended a CBI investigation. It also found seven officials, including Garg, involved in criminal conspiracy.

The WCL vigilance has exposed various undue favours made by the WCL management to Shree Sai Construction Company. The vigilance report which has been lying with the coal ministry since January 2011 has listed a number of fraud against the WCL staff.
One concerns favouritism in the submission of a fake bank guarantee. A source said Shree Sai Construction submitted bank guarantee worth Rs2.24 crore issued by Mahesh Merchant Bank Ltd, Tadoba road branch, Tukum, Chandrapur. The report also mentions that during the course of the investigation, the RBI told the vigilance team that there is no such scheduled, urban co-operative, regional-rural or district central co-operative bank with that name. The report says funds worth Rs79.29 lakh were released to the contractor even after the detection of submission of fake guarantees.

The investigation has exposed other discrepancies too. The tendering for the project saw two bids – from Shree Sai Construction and M/s Metcon India. It later emerged that both were the same groups - Shree Sai Construction participated as a dummy bidder. Both the companies had the same address on their letterheads, a source said. Also, the PWD registration submitted by both the companies was same, the report said.  

Interestingly, Garg, whose tenure ended in April 2012, has been given an extension by the ministry. Meanwhile, in another case, the WCL vigilance department registered various cases of coal pilferage from the stock worth Rs24 crore in 2009-10. In this case too, the vigilance department wrote to Coal India Ltd referring to a CBI report and recommended appropriate action.